Rezoning Sex in the City

Dictating what people can and can’t do with their property is perhaps one of the most controversial forms of regulation, particularly at the local level. Most generally agree that factories should not be located next to schools, but once we go beyond the more obvious incompatible uses the topic can become quite heated. Throw in the touchy subject of adult entertainment and the debate escalates to new levels.

Gwinnett County is currently in the throes of such a debate after having recently rewritten their zoning ordinances to place heavier regulation on its adult business industry. In response to the decision by Tokyo Valentino to begin selling adult products at its store near Gwinnett Place Mall, Gwinnett County created a new zoning scheme that will disallow adult businesses in commercial zones and restrict them to industrial zones. Subsequently, the county sought an injunction in Gwinnett County Superior Court earlier this month to stop Tokyo Valentino from operating in one of its existing commercial zone.

Rewriting zoning codes to disallow adult businesses (or other “undesirable” land uses) from operating in particular areas is hardly a new concept to the area. The City of Atlanta famously rezoned areas of Cheshire Bridge Road in 2005 to exclude adult businesses from operating in the area under the notion that such businesses wold not be compatible with the City’s vision of making the area more walkable and attractive to developers.

Cheshire Bridge Road between Piedmont and Lavista

The Legal Framework for Zoning Adult Businesses

So how exactly is it possible to force a business to cease operations and relocate to another part of the city when the municipality decides it doesn’t like where it is anymore? That seems fundamentally unfair. While zoning was upheld back in the 1920’s as a proper exercise of the state’s police powers, it is still subject to other Constitutional protections. States grant cities and counties the power to zone based on health, safety, welfare, and morals; but that power is restricted chiefly by the 1st Amendment’s freedom of speech and expression, the 5th Amendment’s right to due process, and the 14th Amendment’s equal protection clause. Any zoning restriction enacted by a municipality must not violate those Constitutional protections.

When municipalities began using their zoning power to restrict adult businesses, the US Supreme Court was tasked with devising an argument that would justify such regulatory practices. The selling of adult products is protected as free speech and free expression, but municipalities also have the right to zone based on the health, safety, welfare, and morals of the community. In reviewing the regulation of speech, the Court must first decide if a particular regulation is content-based or content-neutral. A content-based regulation identifies particular types of speech and then regulates them differently than other types of speech. Conversely, a content-neutral regulation simply regulates all speech, regardless of the content. The distinction is important because a content-based restriction has a much higher bar to pass to be considered constitutional and is therefore less likely to be upheld.

In the landmark 1986 case City of Renton v. Playtime Theatres, the US Supreme Court found a zoning ordinance that restricted adult businesses to certain areas of the city to be content-neutral and not content-based. Finding that the City did not enact the regulation based on the sexually explicit material found in adult businesses, but on the increased crime and lower property values produced by such businesses (the so called “secondary effects of such businesses”), it was thus not content-based and a much lower standard was used to determine the constitutionality of the regulation. Content-neutral regulations are analyzed under intermediate scrutiny, meaning that in order for the regulation to be constitutional it must 1.) further an important government interest; 2.) not be based on the suppression of speech; and 3.) be narrowly tailored to further the government interest. [1]

Essentially the only thing the municipality must prove is that the regulation was based on combating the secondary effects of adult businesses and that such businesses are allowed to operate somewhere in the jurisdiction. So long as the municipality presents some amount of evidence that adult businesses contribute to higher crime and lower property values, and that this is the reason why the municipality enacted the ordinance, a court will generally uphold the ordinance. Under intermediate scrutiny, the court gives a large degree of deference to the evidence presented by the government. This means that even if a business can present compelling evidence showing no increase in crime or decrease in property values, the court will generally accept the findings of the government. [2]

Moving beyond the free speech issues, the government still cannot use their zoning authority in such a way as to violate the 5th and 14th Amendments’ protection against a taking without due process and just compensation. When the government rezones property in such a way as to make illegal a use that has existed legally under the old zoning code, it risks committing a taking. This would require it to justly compensate the owner of the property. Most governments get around this by simply grandfathering in existing uses as legal non-conforming uses. In Georgia, a legal non-conforming use can exist until it ceases operation.[3] This means a jurisdiction could rezone a property in 2016, but a non-conforming use could continue to exist indefinitely until it ceases operation. When Gwinnett County revised its zoning code regarding adult businesses it does not appear to have included a grandfather clause, though Atlanta’s 2005 revised zoning code for Cheshire Bridge Road does.

If the government really wants to force out a business, but doesn’t want to commit a taking, it can also use a principle called amortization. This sets up an adequate window of time for the non-conforming business owner to recoup some or all of their investment in the business after which the establishment much cease operation. [4]

This is precisely what landed Atlanta City Councilmember Alex Wan in hot water several years ago. He supported imposing an amortization period for adult businesses on Cheshire Bridge Road that would effectively either forced them out by 2018 or forced them to conform to the zoning changes that were made in the mid 2000’s. However, after public outcry opposing the proposal, the City Council voted down the measure. In doing so, they also voted against a potential means of expediting the revitalization of an area that needs to attract and accommodate additional residents to support intelligent urban growth.

The Zoning of Adult Businesses Forces Us to Evaluate Our Own Ideals

The obvious dispute is over deciding when we want our government zoning scheme to override the demands of the market. Tokyo Valentino is clearly making money in its Gwinnett location and so are the adult businesses (including another Tokyo Valentino) along Cheshire Bridge Road. Though politicians have stated that certain businesses have decided to look elsewhere instead of locating in those particular areas, the market seems to at least somewhat disagree. A new mixed-use development recently opened at the corner of Piedmont and Cheshire Bridge Road. Developers clearly had no problem betting on making money from installing high-end apartments and a grocery store in the vicinity of adult businesses. Yet the answer as to what extent this mixing of desirable and undesirable uses is influenced by market demand, zoning schemes, or amortization-fueled land use changes is unclear.

Cheshire Bridge at Piedmont with Tokyo Valentino on the left and the new development in the center

Zoning to push undesirable, yet in-demand businesses into particular parts of town raises the more fundamental issue of how we organize the morally questionable uses demanded by our communities. As opposed to exclusionary zoning practices that push adult businesses and liquor stores to the outskirts of our societies, the same exclusion of gas stations in favor of more pedestrian-friendly design results in far fewer outcries from the public. This makes sense considering gas stations aren’t tangled up in the complicated web of morals and free speech in quite the same way as adult businesses. The zoning of adult businesses, therefore, seems like a much better conduit for the larger discussion of how we should plan our communities.

Do we implement a strict segmentation of uses (generally referred to as “Euclidean Zoning”) that would dictate that all businesses that produce any negative effects shall go in one area despite what the market supports? If the market allows a coal factory to locate next to an elementary school it’s a bit more clear that the market needs to be corrected, but it becomes more convoluted as we address less objectively incompatible uses. Both Atlanta and Gwinnett have implemented strict zoning schemes regarding adult businesses, though Gwinnett’s scheme is much more authoritative since it demands immediate termination of operations.

If we do adopt Euclidean-style zoning schemes for adult businesses, will this promote the pushing of other less desirable elements of society to those same unfriendly outskirts now occupied by factories and adult businesses? When comparing the placement of low-income housing and adult entertainment businesses, why is there such a disparity in the levels of enthusiasm with which politicians will intervene to correct for the market’s deficiencies? It’s a clear illustration of proponents supporting intervention when an undesirable use affects them (or in the case of politicians, wealthier residents and businesses), but not supporting the same type of intervention when undesirable uses affect lower-income individuals. If any secondary effects are caused by adult businesses, it’s an inadequate solution to force them to leave nice or potentially nice neighborhoods, create a section of town that now comprises all of these adult businesses, and then refuse to undertake remedies to correct the likely situation of lower-income housing be secluded to that part of town.

One alternative is to spread all varieties of uses equally throughout our communities. So with the exception of heavy industrial uses, most parts of our communities would have nice parks, restaurants, and good housing, but also have liquor stores and adult businesses. This equally spreads the positive and negative externalities of particular businesses among the general population. We create fewer “seedy” areas by ensuring that those businesses with negative effects are adequately spaced to meet market demands, yet buffered by uses that produce more positive effects.

Pushing undesirable uses to certain parts of town will only concentrate any secondary effects produced by those uses. While we can strategically plan for where we want those uses, strictly segregating them to certain areas of town is poor policy. It may be appropriate in some circumstances to rezone areas for the purpose of diminishing the concentration of undesirable businesses, but this should go hand-in-hand with a larger plan that adequately integrates all uses.

Weissman, Seth G., Dillard, G. Douglas, and Skinner, Jill. Zoning and Land Use Law in Georgia, 277 (2013).